IndonesiaAustralia

BrazilRussia

CubaPhilippines

ChinaCanada

USOther countries

2120

116.9

5.54.8

2.82.6

0.1114

Global Nickel Reserves in 2019(in million metric tons)

IndonesiaPhilippines

RussiaNew Caledonia

AustraliaCanada

ChinaBrazilCuba

USOther countries

0.80.42

0.270.22

0.180.18

0.110.067

0.0510.014

0.37

Global Nickel Production in 2019(in million metric tons)

Indonesia’s abundant mineral resources, especially for nickel, provide a big opportunity to jump in to battery and EV industry value chain. Indonesia is one of the biggest nickel ore producers and also has the biggest nickel reserves in the world.

Why BatteryIndustry?

Battery has a significant contribution in EV cost (25% to 40%) and raw material contributes to around 60% of battery manufacturing cost. The battery materials include nickel, cobalt, aluminium, manganese and lithium. Nickel is predicted to have a significant portion as a battery component in the future.

Outlook of EV Battery ComponentsKg Content for 50k Wh NMC Battery

(Sherritt)

TODAY 2025

24.1

24.1

24.1

32.4

10.8

10.8

34.4

4.34.3

NickelManganeseCobalt

EV Battery Components

(Vale)

An example of a Nickel-Rich Battery

NickelSulphate

CobaltSulphate

Alumunium orManganese

Sulphate

LithiumCarbonate

CathodeMaterial

Cell (Shell isnickel plated)

Pack

8 parts 1 part 1 part 1 part

Copper

The availability of many raw materials for manufacturing battery in Indonesia should be followed by a carefully planned blueprint for the downstream industry to optimize their utilization.

Indonesia’s MineralResources & Reserves

NickelResources & Reserves(in million metric tons)

CobaltResources & Reserves(in million metric tons)

ManganeseResources & Reserves(in million metric tons)

40.32

9.3215.41

43.26

1.016.420.87

2.28

1.00

0.52

0.56

Hypothethical Resources Inferred Resources Indicated ResourcesMeasured Reserves Possible Reserves Proven Reserves

3.09

71.89

56.4438.61

54.27

17.72

GRASPING THE POTENTIALOF BATTERY INDUSTRYIN INDONESIA

Compiled from various sources by PYC research team.

Blueprint is essential for developing battery industry value chain. Domestic industry should be established to capture optimum added value. Set of regulations is also needed to make domestic industry more competitive to avoid export of semi-finished goods.

Battery IndustryValue Chain

Raw and processedmaterial

Cell componentmanufacturing

Cellmanufacturing

Battery packmanufacturing

Electric vehiclemanufacturing

Recycling

Promoting the domestic mineral processing by enacting the MEMR Regulation No. 11/2019 on Utilization of Mining Minerals and Coal.

Offering tax holiday for the battery industry.

Supporting the domestic EV industry by enacting the Presidential Regulation No. 55/2019 on The Acceleration of Battery Electric Vehicle Program for Road Transportation.

Providing incentives to EV buyers and EV upstream industry developers to grow the EV market.

Purchasing 20% share of Vale (nickel mining company), worth IDR 5.5 trillion through a state-owned mining holding company, MIND ID.

Establishing Indonesia Morowali Industrial Park (IMIP), in Central Sulawesi, as a battery manufacturer cluster. GoI is also considering developing another cluster in Patimban, West Java.

GOI’s Actions

The ChallengesInvestments in BatteryIndustry Lack of blueprint for mineral

utilization for battery industry.

Capital intensive industry.

Absence of battery industry value chain.

Lack of battery standardization.

Small domestic battery demand.

Few capable local human resources for battery industry.

Lack of advanced smelters and technologies for producing class 1 nickel.

Jingmen GEM, Contemporary Amperex Technology (CATL), Tsingshan Group, IMIP and Hanwa has committed to investing USD 4 billion or around IDR 55.7 trillion in Morowali. This consortium collaborates with LG, Volkswagen, Mercedes and Tesla.

PT International Chemical Industry has committed to investing IDR 207.5 billion.

PT QMB New Energy Minerals has invested USD 700 million or IDR 10.2 trillion.

PT Pertamina Persero, PT PLN and Inalum have made a partnership to develop the EV battery industry.

Globally, lithium-ion battery production for electric vehicles is concentrated in four countries: The United States (US), China, South Korea and Poland.

Koppar Resources is planning to build Europe’s first geothermal-lithium plant in the Upper Rhine Valley of Germany, called the Vulcan Lithium Project.

Indonesia’s abundant geothermal and coal potential could be explored as the raw material supply for the battery industry.

Recent studies indicated that geothermal brine is a great potential lithium source with nearly zero environmental impacts and marginal ground or water footprint.

Some studies also highlighted the potential of coal-sourced battery material for the potassium-ion battery. Also, silicon material as an anode of the lithium-ion battery could be sourced from fly ash, a byproduct of coal-fired power plants.

Did You Know?

ABBREVIATIONS:BUMDBUMN

: Regional State-Owned Enterprise: State-Owned Enterprise

EVGoI

: Electric Vehicle: Government of Indonesia

Compiled from varioussources by PYCresearch team.